Gabraith definition of “workably competitive” suggests pragmatism towards reaching perfect competition but his emphasis on price is hardly appealing to suppliers. Especially small suppliers who define competitive markets in terms of lack of barriers to their way of doing business.

The centrality of deﬁning your market; ﬁrms’ efforts to domesticate markets; the tension in market orientation between markets being both ”out there” and possible to affect; the role of buying-side activities.

As you know, our unique medication is the only known cure for the “Papapamaja disease” that terrorizes the population of Papapamaja islands. To produce the medication we need the XXX of 3000 Los Almos oranges.

Unfortunately, last year’s freeze really damaged the harvest and the only supply available on the market this year is 3000 oranges. It is crucial that we get these oranges. It has been drawn to our attention that our biggest competitor also wants to buy the oranges. We therefore give $10. 000 to spend, this is the last money we have and we’re counting on you and you're negotiation skills. If not for the company, so in the sake of the victims suffering from this horrible disease!

“ A company should establish relationships with with prospective suppliers and

customers not only on the the basis of the currently expected performance, but also in

consideration of their capabilities of developing in terms of physical resources,

knowledge, experience, and skills.”

2. Courting of candidates (Stern and El-Ansary, 1977)

Corporate Marketing Systems (autocratic)

Contractual Marketing Systems (democratic)

Administered Marketing Systems (democratic)

Spontaneous Co-ordination by market transactions (anarchistic)

12.
Toward a concept of Domesticated Markets Arndt (1979) Four steps of establishing long-term relationships 3. Maintenance of inter-organizational marketing systems Make sure that co-operation is running smoothly by implementing information and control systems for bidirectional flows. High degree of interdependence = High need for conflict resolution mechanisms 4. Establish divorce proceedings Dissolutions of coalitions because of incompatibility and irreparable dissatisfaction with exchange ratio

13.
Market driven vs. Driving Markets Jaworski et al (2000) Purpose of the article : To refine the notion of market orientation to suggest that there are two complementary approaches to market orientation, (1) market-driven and (2) driving-markets one

Abell argues that a product needs to be looked at as a physical manifestation of “the application of a particular technology to the provision of a particular function for a particular customer group ”.

In effort to influence the development of competitive markets, public procurement agencies typically pursue a neo-classical perspective to their procurement strategies (competitive bidding and other regulations aimed at achieving a perfectly competitive market). These strategies often lead to unintended and unwelcomed consequences, which are in fact limits to competition

Perfect competition : “A market is ‘workably competitive’ if, among other things, there is a progressive technology, and the passing on to consumers of the results of this progressiveness in the form of lower prices, larger output, improved prices.” (Galbraith, 1980/1952)

Market ‘imperfections’ : “That in conditions of real life the position even of any two producers is hardly ever the same due to the facts which the theory of perfect competition eliminates by its concentration on a long-term equilibrium, which is an ever changing world can never be achieved” (Hayek, 1948)

40.
Characteristics of Traditional Public Procurement: Limits to Competition

Arms length approach (competitive bidding) and inflexible processes

Public accountability and competitive frameworks limit partnerships

Few partnerships in order to avoid over-embeddedness (oligopoly, elitism  barrier to entry)

“ Government needs to learn and innovate as much as the private sector and it must create new mechanisms for sharing ideas and best practices… it needs a new generation of innovation in the public sector”

*Acknowledgement of the need to innovate but with pragmatic limits to competition

Caldwell : describes the efforts public procurement agencies make to influence the development of competitive markets. Their efforts (regulations/interventions) to create competitiveness often lead to unintended consequences. These consequence are in fact limits to competition.

The are innovations in the public sector that are in fact helping to increase competiveness, however these innovations are more pragmatic in their efforts to influence a competitive market.

Arndt: The Traditional Marketing Model has been out-runned by reality. Organizations do cooperate within networks and they do make long-term commitments.

The theory of Domesticated Markets explains how organizations get away from the traditional marketing mix and now focus on political aspects and design, implementation, and maintenance of effective inter-organizational marketing systems